China-Africa Ship Trade Cooperation Blooming

Ao Yangli

Republic of Guinea and and CSSC signed the agreement on a package of cooperation projects in the ocean field in Beijing on September 2 on the eve of the Beijing Summit of China-Africa Cooperation Forum 2018, they will conduct all-round cooperation in the marine fisheries and fishery area security,ocean transport equipment, ship repair and construction facilities and other fields.This is another achievement of China-Africa friendly cooperation.

This year is the 40th anniversary of China’s reform and opening up and also the 5th anniversary of the “Belt &Road” initiative. At opening ceremony of the Beijing Summit of China-Africa Cooperation Forum, Chinese President Xi Jinping vowed to work together to create a win-win China-Africa Community of Destiny, seize the opportunity of the strategic docking between China and Africa, make good use of the great opportunities brought by the joint construction of "Belt and Road," open up new space for cooperation, explore new potential for cooperation, deepen cultivation in the fields of traditional superiority, and accelerate the cultivation of bright spots in the new economic field.

China-Africa cooperation has been on for a long time in the shipbuilding industry. Over recent years, CSSC,CSIC and private enterprises including Jianglong Shipbuilding Co Ltd have responded to the State call, seize the opportunity of "Belt and Road"construction and military-civilian integration, actively expand African overseas markets, extensively develop cooperation with African countries in the fields of ship building and repair, shipyard reconstruction, ocean transportation, and so on, and jointly develop the marine economy. A new movement for China-Africa cooperation is played.

Demand Docking, China-Africa Cooperation Continues to Warm Up

Since the reform and opening up,through 40-year development, China shipbuilding industry has abundant technical strength, and China has become the world shipbuilding big country. Over recent years, affected by the 2008 international financial crisis,the global shipbuilding market continues to be depressed, and the problem of overcapacity is prominent. With the implementation of marine power strategy and the construction of "Belt and Road",Chinese shipbuilding enterprises have a new direction and opportunity for actively"go out" to expand the overseas market and exporting high-quality production capacity.

At present, the shipbuilding industry of African countries is in the initial stage, the fleet is aging seriously, it is difficult to fill the huge transportation demand gap caused by the abundant oil and gas resource export. In this case,the complementary cooperation between Chinese shipbuilding enterprises and African countries comes naturally. In early 2015, China and the African Union signed a 48-year memorandum on transport development covering almost all of Africa, including ship-related projects. At the Johannesburg Summit of the Forum on China-Africa Cooperation,held in December of the same year, the Chinese Government announced that it will focus on the implementation of "Ten Cooperation Plans" in Africa in the next three years including the China-Africa Infrastructure Cooperation Plan and the Financial Cooperation Plan. A total of $60 billion was provided to ensure the implementation of the Cooperation Plans, with the establishment of the first $10 billion China-Africa Capacity Cooperation Fund.

Data released by the Ministry of Commerce show that since the first half of 2015, China's trade volume with Africa was showing negative growth; by the first half of 2017, however, China-Africa trade volume had changed from negative to positive for the first time in nearly three years, and the export of vehicles had become a new bright spot in China's exports to Africa, in which the increase of ship exports had reached 200%.

Fulfilling the Mission, Deep Cultivation of African Market by Shipbuilding Central Enterprises

As a shipbuilding central enterprise,CSSC and CSIC shoulder the mission and responsibility of “serving the State strategy and guiding industry development”. Over recent years, Big Two have been penetrating into potential demand of the African shipbuilding market and have achieved a great deal.

In August 2014, CSSC Huangpu Wenchong Shipbuilding Co., Ltd.and the Suez Canal Authority signed a contract for the construction of an offshore multipurpose ocean engineering vessel. The project is a good start for the cooperation between Chinese shipbuilding enterprises and Egypt's Suez Canal Authority, and has contributed to the development of engineering equipment such dredgers and offshore engineering vessels and other equipment in African countries. On December 21, 2016,Jiangnan Shipbuilding (Group) Co.,Ltd. signed an order for 1+1 13000 m3 LPG ships with Algeria's Hyproc Shipping Company. In March of this year, Guangzhou Shipyard International signed a contract with Algeria's staterun shipping company (ENTMV) to build a ro-ro passenger ship, the largest ro-ro passenger ship currently under construction in Algeria.

Furthermore, CSSC also undertook the Egypt Alexandria Shipyard renovation project, which greatly promoted the development of the Egyptian economy.On May 30, 2015, the renovation project of Alexandria Shipyard in Egypt was completed and officially started business,its design and construction were undertaken by CSSC Trading Company,CSSC No.9 Design and Research Institute Engineering Co., Ltd., and Hudong Zhonghua Shipyard Engineering Co., Ltd.This is a successful example of CSSC's"going out" strategy and has set up a good image of Chinese shipbuilding companies in Africa.

CSIC is also China’s shipbuilding central enterprise with abundant strength.Centering on the goal of building a shipbuilding industry-based innovative global leader with military-civilian integration, leading technology, and integrated production and financing,CSIC has enriched its product shelves and pedigree, established business ties with more than 30 countries around the world, and actively cooperated with African countries.

At the end of 2014, CSIC Chongqing Gearbox Co., Ltd. and the Ethiopian National Cement Plant signed a vertical mill reducer contract for the 3000t/a cement production line of the Ethiopian National Cement Plant. In 2017, the Eritrean Diesel Power Station Project,undertaken by CSIC Diesel Engine Co.,Ltd. and CSIC No.711 Research Institute,was successfully connected to the grid. This is the first foreign aid diesel power station project in China, which has created many "first" -- equipment 12K60MC-S low-speed diesel engine and TFM23047-40 low-speed generator,which were designed and manufactured for the first time in China, and were also used for an overseas stationary power station. The diesel power station project provides the necessary electricity for Eritrea's economic prosperity.

In the field of ship repair, covering multi-industry clusters, the world's leading integrated logistics supply chain service group, China COSCO Shipping Group Co., Ltd. and Egypt Air, ET and Libyan Airlines have been maintaining close cooperation. Recently, Cosco Shipping Heavy Industry Co., Ltd. won the successful bid for the Ethiopia series of bulk cargo ship repair project, and continued communication with Ugandan shipowners, laid the foundation for longterm cooperation.

In Response to the Call, Private Enterprises Actively Entering Africa

Apart from shipbuilding central enterprises, Chinese private shipbuilding enterprises also actively respond to the State call for “walk out”, seize the“Belt & Road” construction opportunity,actively conduct business cooperation with African countries, the State new and high technology enterprise focusing on green and high performance ship and boat R&D and manufacturing is a typical example.

In recent years, Jianglong Shipbuilding has followed the national development strategy, focused on expanding the market of countries along"Belt and Road", and actively engaged in business negotiations with African countries, successively Madagascar,Nigeria, Mozambique, the Republic of Mali, Mozambique, Tanzania and other African countries along the route of Belt and Road, built more than 30 ships,frequently appearing on the stage of international cooperation. The company's performance in Africa is also growing steadily, with orders for 10 Nigerian law enforcement ships in 2017 totaling more than 170 million yuan.

“The implementation of the'Belt and Road' initiative has promoted infrastructure construction and port construction in the countries along the route, strengthened trade contacts with domestic enterprises and African countries, and created a broader space for domestic enterprises to develop."Gong Xuehua, deputy general manager of Jianglong boat, said, in the global shipbuilding market, where both challenges and opportunities exist, the booming African marine economy is also increasing in demand for ships, which brings new opportunities for domestic shipbuilding enterprises to "go out" with their production capacity and capital.